Related Tags:

SAN FRANCISCO (KCBS) – A new study critical of a program to encourage investment that creates jobs in disadvantaged parts of California has found that regions such as San Francisco that are already prospering tend to benefit the most.

The report by the California Budget Project examined the impact of so-called enterprise zones set up to encourage economic development in parts of the state where unemployment is high questions the program’s impact since its inception 30 years ago.

Study Finds SF, Other Already Prosperous Regions Benefit Most From State Program To Create Jobs

Barbara Taylor

The annual cost of the program has grown to $700 million and will cost 1 billion dollars by 2016, while the benefits have largely gone to huge corporations.

“At that cost, it needs to be producing outcomes,” said Craig Hoene, executive director of the think tank.

The new study echoes two others the California Budget Project has done over the years that have consistently questioned the effectiveness of enterprise zones.

Hoene said the tax credits often go to areas with relatively low unemployment, such as San Francisco, which has received more than 11.2 percent. By contrast, comparatively few tax credits go to rural areas with high jobless rates.

“You’ve got a number of criteria that are allowing lots of folks into the system to capitalize on the system without actually doing the kind of hiring that we’re intending.”

Hoene suggested the state would do better to spend the money on other kinds of job training or education programs that help lift the disadvantaged out of poverty.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)